erawatch country report 2008 - an assessment of research ... · the austrian research and...

ERAWATCH Country Report 2008 An assessment of research system and policies

Austria

Brigitte Tiefenthaler

EUR 23766 EN/7 - 2009

The mission of the JRC-IPTS is to provide customer-driven support to the EU policy-making process by developing science-based responses to policy challenges that have both a socio-economic as well as a scientific/technological dimension. European Commission Joint Research Centre - Institute for Prospective Technological Studies Directorate General Research Contact information Address: Edificio Expo. c/ Inca Garcilaso, 3. E-41092 Seville (Spain) E-mail: [email protected] Tel.: +34 954488318 Fax: +34 954488300 IPTS website: http://ipts.jrc.ec.europa.eu JRC website: http://www.jrc.ec.europa.eu DG RTD website: http://ec.europa.eu/research/ Legal Notice Neither the European Commission nor any person acting on behalf of the Commission is responsible for the use which might be made of this publication.

Europe Direct is a service to help you find answers to your questions about the European Union

Freephone number (*):

00 800 6 7 8 9 10 11

(*) Certain mobile telephone operators do not allow access to 00 800 numbers or these calls may be billed.

A great deal of additional information on the European Union is available on the Internet. It can be accessed through the Europa server http://europa.eu/ JRC 50269 EUR 23766 EN/7 ISBN 978-92-79-11612-4 ISSN 1018-5593 DOI 10.2791/74610 Luxembourg: Office for Official Publications of the European Communities © European Communities, 2009 Reproduction is authorised provided the source is acknowledged Printed in Spain

http://ipts.jrc.ec.europa.eu/http://www.jrc.ec.europa.eu/http://ec.europa.eu/research/http://europa.eu.int/citizensrights/signpost/about/index_en.htm#note1#note1

ERAWATCH COUNTRY REPORT 2008

An assessment of research system and policies

Austria

ERAWATCH Network -Technopolis Forschungs- und

Beratungsgesellschaft mbH, Wien

Brigitte Tiefenthaler

Joint Research Centre

Directorate-General for Research

Page 1 of 53

COUNTRY REPORT 2008: AUSTRIA

Acknowledgements and further information: This analytical country report is one of 27 reports for EU Member States prepared as part of the ERAWATCH project. ERAWATCH is a joint initiative of the European Commission's Directorates General for Research and Joint Research Centre. For further information on ERAWATCH see http://cordis.europa.eu/erawatch. The analytical framework and the structure have been developed by the Institute for Prospective Technological Studies of the European Commission's Joint Research Centre (JRC-IPTS, project officer: Jan Nill) and have been improved based on com-ments of DG Research, Ken Guy, Stefan Kuhlmann, Nikos Maroulis, Patries Boek-holt, Aris Kaloudis, Slavo Radosevic and Matthias Weber. The report has been produced by the ERAWATCH Network in the framework of the specific contract on ERAWATCH country reports 2008 commissioned by JRC-IPTS (project manager: Nikos Maroulis, Logotech). It makes use of information provided in the ERAWATCH Research Inventory with support of the ERAWATCH Network (http://cordis.europa.eu/erawatch/index.cfm?fuseaction=ri.home). It has benefited from comments and suggestions of Matthias Weber, who reviewed the draft report. The contributions and comments of Alexander Grablowitz, Jan Nill, Hans-Günther Schwarz from JRC-IPTS and Sylvia Jahn (DG Research) are also gratefully ac-knowledged. The report is only published in electronic format and available on the ERAWATCH website: http://cordis.europa.eu/erawatch. Comments on this report are welcome and should be addressed to Mark Boden ([email protected]).

Page 2 of 53

http://cordis.europa.eu/erawatchhttp://cordis.europa.eu/erawatch/index.cfm?fuseaction=ri.homehttp://cordis.europa.eu/erawatchmailto:[email protected]


Executive Summary Research-related policies aimed at increasing investment in knowledge and strengthening the innovation capacity of the EU economy are at the heart of the Lis-bon Strategy. The strategy reflects this in guideline No. 7 of the Integrated Guidelines for Growth and Jobs which aims to increase and improve investment in research and development, in particular in the private sector. The report aims at supporting the mu-tual learning process and the monitoring of Member States efforts. The main objec-tive is to characterise and assess the performance of the national research system of Austria and related policies in a structured manner that is comparable across coun-tries. In order to do so, the system analysis focuses on key processes relevant for system performance. Four policy-relevant domains of the research system are distin-guished, namely resource mobilisation, knowledge demand, knowledge production and knowledge circulation. This report is based on a synthesis of information from the ERAWATCH Research Inventory and other important available information sources. The Austrian research and innovation system has gone through a catching-up phase during the last decade. Now Austrian R&D policy makers are in the fortunate position to face opportunities and challenges from a position of relative strength and to de-velop a new model for Austria's future R&D policy without the immediate pressure of international benchmarks. Several 'old' weaknesses have been overcome, at least partly, e.g. the mobilisation of resources for R&D, science-industry co-operation, in-ternational R&D collaboration, and the institutional funding and governance of public universities. The key challenges for the future development are mainly of a cross-cutting nature, important to all domains analysed in this report: the issue of human resources, the governance of public institutional R&D funding, the coherence and performance of the entire 'portfolio' of public R&D funding, and the still unsettled divi-sion of responsibilities and tasks between ministries and funding agencies (see table 1). In addressing these challenges, however, R&D policy makers seem to be prone to try and solve 'everything' within the realm of R&D policy and funding programmes in particular; interactions with other policies or the fact that other policies might actu-ally set the pace in many fields are often neglected, e.g. economic policies, sectoral thematic policies such as environment, energy or health, immigration policies and regulations for right of residence, policies for equal opportunities, and education pol-icy. Recent policy initiatives tackle several key weaknesses of the Austrian research and innovation System: (i) coherence and efficiency of the public R&D funding 'portfolio' are currently evaluated, which will provide the basis for future policy action, (ii) per-formance-based funding of research institutions has already been started with the University Act 2002, and (iii) R&D policy makers have eventually understood the out-standing importance of human resources. One of the key weaknesses not yet appropriately addressed is the governance of publicly funded non-university research institutes; before it is possible to set up per-formance agreements it will be essential to clearly define the role and function of these institutions in the research system. The ongoing discussion between the Fed-eral Ministry of Science and Research and the Austrian Academy of Sciences is a promising step in the right direction. All main challenges mentioned cannot be solved

Page 3 of 53


within a couple of years - they require fundamental changes, which take their inher-ent time to produce visible effects. Patience and endurance will be needed, also for the further implementation of structural changes already started in recent years. Most of these challenges will also require joint efforts of all ministries involved in R&D as well as the co-operation (or at least coherent approaches) with other, sectoral, minis-tries. This is an additional challenge, given the fact that incentives for co-operation in policy making and implementation are weak – between institutions as well as within. Domain Challenge Assessment of strengths and weaknesses

Justifying re-source provision for research ac-tivities

R&D has become a policy priority supported by all political par-ties. R&D expenditures have grown substantially and GERD has surpassed the EU average. On the downside the R&D funding system is now 'overcrowded' with too many overlapping or iso-lated measures, many of sub-critical size, jeopardizing the justifi-cation of additional resources for R&D. The structural reform of R&D funding agencies provides the institutional basis for an effi-cient implementation of increased public funding, but the division of responsibilities and tasks between ministries and agencies is still unsettled.

Securing long term investment in research

Annual budgeting cycles in public R&D funding have been a ma-jor obstacle to long-term planning. However, the universities have been given far-reaching autonomy and more planning secu-rity through three-year global budgets with the reform of the Uni-versity Act 2002.

Dealing with bar-riers to private R&D investment

Business R&D expenditures have grown substantially during the last decade, and so have the number of R&D performing compa-nies and R&D investments from foreign companies. This growth can be observed throughout (nearly) all branches.

Resource mobilisation

Providing quali-fied human re-sources

A scarcity of human resources is expected to be the key obstacle for the future of the Austrian research and innovation system; the biggest challenges are the low participation of women in re-search and the low share of tertiary education graduates, esp. in sciences and engineering.

Identifying the drivers of knowl-edge demand

Knowledge intensity has increased throughout all sectors of economy.

Co-ordination and channelling knowledge de-mands

Thematically open funding measures enable the bottom-up ar-ticulation of knowledge demand. Links from R&D policy to gen-eral innovation conditions, sectoral policies and societal inputs are weak.

Knowledge demand

Monitoring of demand fulfil-ment

The culture of evaluation and of funding programmes is fairly well established now, which has lead to more quality orientation. The fuzzy distribution of competences between ministries produces overlaps and 'blind spots', in particular with regard to the institu-tional aspects of funding.

Ensuring quality and excellence of knowledge pro-duction

The new governance of public universities provides a good basis for ensuring academic knowledge quality and enables universi-ties to embark on new scientific opportunities more flexibly. How-ever, in the cases of most other publicly funded non-university research institutes governance still lacks clear definitions of roles, quality control and performance orientation.

Knowledge production

Ensuring ex-ploitability of knowledge

A new culture of science-industry collaboration has been created through targeted measures, above all the competence centres programmes. Thematically open funding instruments work well as enablers for the demand-driven matching of specialisations.

Page 4 of 53


Domain Challenge Assessment of strengths and weaknesses

Facilitating circu-lation between university, PRO and business sectors

The improved co-operation culture is a good basis for the circula-tion of knowledge between R&D performing companies and the scientific community. A large variety of new support measures at national and regional level aims at improving knowledge circula-tion at all levels and in all sectors, but the efficiency of this mix of instruments and the quality of policy delivery need critical as-sessment.

Profiting from international knowledge

Austrian R&D performing institutions are open to international co-operation and actively participate in international initiatives.

Knowledge circulation

Enhancing the absorptive ca-pacity of knowl-edge users

The Austrian education system does not provide for enough S&T graduates and leaves behind significant population groups, es-pecially people with an underclass or migration background. Moreover, the general conditions for human resources do not encourage intersectoral mobility, which is an obstacle to the cir-culation of knowledge.

The ERA dimension plays a relatively small role in the general national research pol-icy debate, even though Austrian policy makers have fully adopted the Lisbon and Barcelona objectives for Austrian R&D policy, and in the government's programme. ERA is only briefly referred to as 'a vital frame of reference'. However – and although no systematic assessment of the impacts of ERA in Austrian R&D policy has been performed yet – it is safe to state that European policies and activities related to R&D and innovation have had significant effects in Austria, which is visible e.g. in the pro-gramme and evaluation culture that has been developed in Austria throughout the last decade, in the increasing number of thematic funding programmes, and in the debate about 'excellence'. The importance of international co-operation, mobility and competition has become widely accepted and Austrian companies, universities and PRO are particularly active in cross-border projects, supported by substantial R&D policy measures that stimulate and foster the participation in international pro-grammes and facilitate international mobility. Moreover, many funding programmes have been opened to the participation of organisations located abroad. Joint pro-gramming at European level so far has taken place mainly in the form of joint calls within ERA-NET projects, in which Austrian organisations are well represented. In order to realise real common pot programmes with joint evaluations and joint funding decisions at European level, legal barriers related to the decision making power would have to be overcome1. Domain Main policy opportunities Main policy-related risks

Resource mobilisation

• to make use of the new federal budget act that introduces budgeting cycles of four-years and is an important step towards planning security for all multi-annual pol-icy measures.

• to continue the increase of R&D expendi-tures towards the 3% objective.

• to pursue the issue of human resources with emphasis and endurance, in particu-lar to implement attractive career models for scientists and university staff on the basis of the collective agreement2, and to address the 'next generation' of scientists

• to neglect efficiency and perform-ance while being 'addicted' to the 3% expenditure target might jeop-ardise the claim for additional re-sources.

• to put the increase of R&D spending higher than the general conditions of R&D and innovation and the im-provement of the human resource 'bottleneck'.

• to implement targeted human re-source programmes while neglect-ing human resource aspects in the

1 See chapter 5.5 for details. 2 See the discussion in chapter 2.3 for details

Page 5 of 53


and researchers. general R&D policy portfolio. Domain Main policy opportunities Main policy-related risks

Knowledge demand

• to focus on the effectiveness and effi-ciency of the entire portfolio of public R&D funding and financing instruments – across the borders of ministerial compe-tences and responsibilities.

• to implement new forms of public pro-curement in favour of innovation as driv-ers of knowledge demand.

• to establish good governance at federal level, in particular the interaction between the ministries, and to re-define the role of the Austrian Council as a true advisory body to the government.

• to address ever smaller target groups through specific funding programmes while losing sight of 'the bigger picture', i.e. the interac-tions with other programmes or pol-icy instruments, approaches beyond project funding, and the role of insti-tutions.

Knowledge production

• to implement and further improve the uni-versity governance following the reform of the University Act in 2002.

• to set up a performance agreement with the Austrian Academy of Science, provid-ing transparency, planning security and quality control.

• to loose patience and persistence in the ongoing process of implement-ing the University Act 2002.

• to neglect horizontal issues in the university sector, e.g. interuniversity co-operation in research and teach-ing, joint infrastructures, procure-ment, and IP strategies.

• to restrict the reform of institutional governance to universities and the Academy of Sciences while neglect-ing other institutions that receive in-stitutional funding.

Knowledge circulation

• to build on the well developed culture of R&D co-operation between science and industry and to develop it further.

• to reform the secondary education sys-tem.

• to establish a new culture of co-operation between school education and science and to spark young people's interest in science and technology.

• to let ideological arguments domi-nate over facts in the debate on education.

Page 6 of 53


TABLE OF CONTENTS Executive Summary....................................................................................................3 1 - Introduction and overview of analytical framework........................................9

1.1 Scope and methodology of the report in the context of the renewed Lisbon Strategy and the European Research Area .......................................9

1.2 Overview of the structure of the national research system and its governance .................................................................................................11

2 - Resource mobilisation .................................................................................14 2.1 Analysis of system characteristics...............................................................14

2.1.1 Justifying resource provision for research activities ............................14 2.1.2 Securing long term investment in research .........................................15 2.1.3 Dealing with uncertain returns and other barriers to business

R&D investment ..................................................................................17 2.1.4 Providing qualified human resources ..................................................20

2.2 Assessment of strengths and weaknesses .................................................21 2.3 Analysis of recent policy changes in 2007 / 2008........................................21 2.4 Assessment of policy opportunities and risks..............................................23 2.5 Summary of the role of the ERA dimension ................................................23

3 - Knowledge demand ....................................................................................24 3.1 Analysis of system characteristics...............................................................25

3.1.1 Identifying the drivers of knowledge demand ......................................25 3.1.2 Co-ordinating and channelling knowledge demands...........................29 3.1.3 Monitoring demand fulfilment ..............................................................30

3.2 Assessment of strengths and weaknesses .................................................31 3.3 Analysis of recent policy changes in 2007/2008..........................................32 3.4 Assessment of policy opportunities and risks..............................................32 3.5 Summary of the role of the ERA dimension ................................................33

4 - Knowledge production.................................................................................33 4.1 Analysis of system characteristics...............................................................34

4.1.1 Improving quality and excellence of knowledge production ................34 4.1.2 Improving exploitability of knowledge production ................................36

4.2 Assessment of strengths and weaknesses .................................................38 4.3 Analysis of recent policy changes in 2007/2008..........................................38 4.4 Assessment of policy opportunities and risks..............................................39 4.5 Summary of the role of the ERA dimension ................................................40

5 - Knowledge circulation .................................................................................40 5.1 Analysis of system characteristics...............................................................41

5.1.1 Facilitating knowledge circulation between university, PRO and business sectors .................................................................................41

5.1.2 Profiting from access to international knowledge ................................42 5.1.3 Absorptive capacity of knowledge users .............................................43

5.2 Assessment of strengths and weaknesses .................................................44 5.3 Analysis of recent policy changes in 2007/2008..........................................44

Page 7 of 53


5.4 Assessment of policy opportunities and risks..............................................45 5.5 Summary of the role of the ERA dimension ................................................46

6 - Overall assessment and conclusions ..........................................................47 6.1 Strengths and weaknesses of research system and governance ...............47 6.2 Policy dynamics, opportunities and risks from the perspective of the

Lisbon agenda.............................................................................................48 6.3 System and policy dynamics from the perspective of the ERA ...................50

References ...............................................................................................................52 List of Abbreviations .................................................................................................53

Page 8 of 53


1 - Introduction and overview of analytical frame-work

1.1 Scope and methodology of the report in the context of the renewed Lisbon Strategy and the European Research Area

As highlighted by the Lisbon Strategy, knowledge accumulated through investment in R&D, innovation and education is a key driver of long-term growth. Research-related policies aimed at increasing investment in knowledge and strengthening the innova-tion capacity of the EU economy are at the heart of the Lisbon Strategy. The strategy reflects this in guideline No. 7 of the Integrated Guidelines for Growth and Jobs. This aims to increase and improve investment in research and development (R&D), with a particular focus on the private sector. One task within ERAWATCH is to produce analytical country reports to support the mutual learning process and the monitoring of Member States' efforts. The main objective is to analyse the performance of national research systems and related policies in a comparable manner. The desired result is an evidence-based and horizontally comparable assessment of strengths and weaknesses and policy-related opportunities and risks. A particular consideration in the analysis is given to elements of Europeanisation in the governance of national research systems in the framework of the European Research Area, relaunched with the ERA Green Paper of the Commission in April 2007. To ensure comparability across countries, a dual level analytical framework has been developed. On the first level, the analysis focuses on key processes relevant to sys-tem performance in four policy-relevant domains of the research system: 1. Resource mobilisation: the actors and institutions of the research system have to

ensure and justify that adequate public and private financial and human resources are most appropriately mobilised for the operation of the system.

2. Knowledge demand: needs for knowledge have to be identified and governance mechanisms have to determine how these requirements can be met, while setting priorities for the use of resources.

3. Knowledge production: the creation and development of scientific and technologi-cal knowledge is clearly the fundamental role of a research system.

4. Knowledge circulation: ensuring appropriate flows and distribution of knowledge between actors is vital for its further use in economy and society or as the basis for subsequent advances in knowledge production.

These four domains differ in terms of the scope they offer for governance and policy intervention. Governance issues are therefore treated not as a separate domain but as an integral part of each domain analysis.

Page 9 of 53


Figure 1: Domains and generic challenges of research systems Resource mobilisa-

tion Knowledge de-

mand Knowledge pro-

duction Knowledge circula-

tion • Justifying resource

provision • Long term research

investment • Barriers to private

R&D funding • Qualified human

resources

• Identification of knowledge de-mand drivers

• Co-ordination of knowledge de-mands

• Monitoring of de-mand fulfilment

• Quality and excel-lence of knowledgeproduction

• Exploitability of knowledge produc-tion

• Knowledge circula-tion between univer-sity, PRO and busi-ness sectors

• International knowl-edge access

• Absorptive capacity

On the second level, the analysis within each domain is guided by a set of generic "challenges" common to all research systems that reflect conceptions of possible bot-tlenecks, system failures and market failures (see figure 1). The way in which a spe-cific research system responds to these generic challenges is an important guide for government action. The analytical focus on processes instead of structures is condu-cive to a dynamic perspective, helps to deal with the considerable institutional diver-sity observed, and eases the transition from analysis to assessment. Actors, institu-tions and the interplay between them enter the analysis in terms of how they contrib-ute to system performance in the four domains. Based on this framework, analysis in each domain proceeds along the following five steps. The first step is to analyse the current situation of the research system with regard to the challenges. The second step in the analysis aims at an evidence-based assessment of the strengths and weaknesses with regard to the challenges. The third step is to analyse recent changes in policy and governance in perspective of the results of the strengths and weaknesses part of the analysis. The fourth step focuses on an evidence-based assessment of policy-related risks and opportunities with re-spect to the analysis under 3) and in the light of Integrated Guideline 7; and finally the fifth step aims at a brief analysis of the role of the ERA dimension. This report is based on a synthesis of information from the European Commission's ERAWATCH Research Inventory3 and other important publicly available information sources. In order to enable a proper understanding of the research system, the ap-proach taken is mainly qualitative. Quantitative information and indicators are used, where appropriate, to support the analysis. After an introductory overview of the structure of the national research system and its governance, chapter 2 analyses resource mobilisation for R&D. Chapter 3 looks at knowledge demand. Chapter 4 focuses on knowledge production and chapter 5 deals with knowledge circulation. Each of these chapters contains five main subsec-tions in correspondence with the five steps of the analysis. The report concludes in chapter 6 with an overall assessment of strengths and weaknesses of the research system and governance and policy dynamics, opportunities and risks across all four domains in the light of the Lisbon Strategy's goals.

3 ERAWATCH is a cooperative undertaking between DG Research and DG Joint Research Centre and is implemented by the IPTS. The ERAWATCH Research Inventory is accessible at http://cordis.europa.eu/erawatch/index.cfm?fuseaction=ri.home. Other sources are explicitly refer-enced.

Page 10 of 53


1.2 Overview of the structure of the national research system and its governance

Austria is a small country with only 1.7% of the total EU population. GDP per capita is nearly 30% above the EU 27 average and unemployment rates are low with only 4.4% in 2007 versus the EU average of 7.1% (Eurostat 2008). In 2004, Austria's GERD was 2.24%, well above the EU 25 average of 1.86%, but still considerably lower than in other European countries of similar size, e.g. in Denmark, Finland, Sweden and Switzerland (Eurostat 2007). The growth rate of GERD in Austria be-tween 2000 and 2004 has been among the highest in the EU and R&D expenditures have grown faster than GDP at an average annual growth rate of 7.84%. While the EU 27 average has sunk to 1.84%, Austrian expenditures have grown constantly and are expected to reach 2.54% in 2007 (Statistik Austria 2008). All major R&D financ-ing sectors, especially government, business and abroad, have contributed to this growth, though at different paces. Figure 2 below shows the Austrian research system at national level. Three minis-tries are responsible for research and technology policy: the Federal Ministry of Sci-ence and Research (BMWF) is responsible for tertiary education and for basic re-search, i.e. for universities, universities of applied sciences and for non-university re-search institutions such as the Austrian Academy of Sciences and the Ludwig Boltz-mann Society. It shares responsibility for the Austrian Science Funds (FWF) with the BMVIT and represents Austria at the European level on issues related to research and university education. The Federal Ministry of Transport, Innovation and Technol-ogy (BMVIT) is in charge of the biggest public budget in applied research. It holds a stake of the Austria Wirtschaftsservice Gesellschaft (AWS), and of the Austrian Re-search Promotion Agency (FFG), to which it contributes the majority of application-oriented research funding. It is the majority shareholder of the Austrian Research Centers (ARC), and it shares responsibility for the Austrian Science Fund (FWF) with the BMWF. The Federal Ministry of Economics and Labour (BMWA) is responsible for innovation support, technology transfer and the promotion of entrepreneurship; it holds the remaining 50% of the FFG and the AWS and it supports the Christian Dop-pler Research Association (CDG).4 The Federal Ministry of Finance (BMF) is not di-rectly responsible for R&D policy but it governs the allocation of financial resources and it directly handles the national institutional funding for some research institutions. In recent years the Ministry of Finance's influence on the Austrian R&D policy has increased because it sets standards for the design, implementation and monitoring of programmes. The activities of other, sectoral ministries (e.g. for agriculture, health etc.) are comparably small and they are basically focused on contracting research required by the respective ministry for the fulfilment of its responsibilities. The Austrian Parliament has the legislative power. Two committees deal with re-search related matters: the committee on science and the committee on research, technology and innovation which has been newly established by the current coalition

4 The administrative structure has changed in January 2007 with the inauguration of the present gov-ernment: the former Ministry of Science, Education and Culture (BMBWK) has been split into a Fed-eral Ministry of Education, the Arts and Culture (BMUKK) and a Federal Ministry of Science and Re-search (BMWF). The responsibilities of the other ministries involved in R&D policy have remained more or less unchanged. In July 2008, early parliamentary elections have been decided to take place in autumn 2008. This means that the division of R&D related responsibilities between ministries could be changed again by the next government.

Page 11 of 53

http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=EEEB17F2-F04D-6A5D-FF78C5A9214E5E52http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=EEEB17F2-F04D-6A5D-FF78C5A9214E5E52http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=7D87CDED-CFFC-6A52-805452468B3CA0AChttp://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=7D87D0AC-B9F9-18A0-0263944B9B9A12B8http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=7D87D0AC-B9F9-18A0-0263944B9B9A12B8http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=1B51AEA2-FEFC-DD21-8515942DE0319B0Ahttp://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=1B51AEA2-FEFC-DD21-8515942DE0319B0Ahttp://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=7D87D204-0F3C-A968-9C038B564207CED7http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=7D87D204-0F3C-A968-9C038B564207CED7http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=CF7C48F7-0941-8833-FE0C6EAE68776384http://www.bmf.gv.at/http://www.parlament.gv.at/


government in 2007. In practice, the policy debate and the development of new pol-icy measures takes place outside the parliament to a large extent and the main driver is the administrative level within the ministries in charge. There are two major advisory bodies: the Austrian Council for Research and Tech-nology Development (Austrian Council) advises the government in all matters related to research, technology and innovation and the Austrian Science Council is the main advisory body in all university-related matters. It advises the Federal Ministry of Sci-ence and Research (BMWF) and also the parliament and the universities.

Figure 2: Structure of the Austrian research system at national level

Source: ERAWATCH Research Inventory 2008, Structure of the Research System; see page 53 for a list of abbreviations

At the operational level, most of the funding for R&D and innovation is managed by three agencies on behalf of the ministries: the Austrian Science Funds (FWF) is the most important body for the funding of basic research, the Austrian Research Promo-tion Agency (FFG) funds applied research and development, and the Austria Wirtschaftsservice (AWS) is specialised in funding start-ups and innovation projects in companies. This structure is the result of an organisational reform of the funding system that was performed some four years ago.

Page 12 of 53

http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=632EBBBE-E884-55B1-B515AF2384CADD2Fhttp://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=632EBBBE-E884-55B1-B515AF2384CADD2Fhttp://www.wissenschaftsrat.ac.at/http://cordis.europa.eu/erawatch/index.cfm?fuseaction=ri.content&topicID=35&countryCode=AT&parentID=34http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=7D87CA72-030C-F09E-592EAE517D7C87B3http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=7D87CC28-BF66-07C8-A96287910045CA39http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=7D87CC28-BF66-07C8-A96287910045CA39http://www.awsg.at/http://www.awsg.at/


The Role of Regions in Research Governance Austria's administrative structure is based on the constitutional principles of federal-ism and local self-administration of municipalities and it comprises administrative bodies at three levels: • at national level the Federal Government, • at regional level the federal state administrations of the nine Federal States

('Bundesländer') of Burgenland, Carinthia, Lower Austria, Upper Austria, Salz-burg, Styria, Tyrol, Vorarlberg and Vienna;

• at the local level the municipal administrations of 2,359 Austrian municipalities. Although research and technology policy traditionally is the responsibility of the na-tional government, most of the federal states have developed or increased their en-gagement in this domain. This process began in the mid 1990ies and was triggered by EU membership and the availability of Structural Funds as well as by the availabil-ity of additional money mainly from the privatisation of energy utilities and banks. To-day, seven out of the nine federal states engage explicitly in R&D policy. In total, the Federal States together account for approx. 5.5%5 of the total Austrian R&D expendi-tures, which in practice is more influential than it seems at first glance: these funds can be disposed of more flexibly than those at the national level because the share of institutional obligations is comparatively low. The main focus of the Federal States' RTI policy is on the innovation side and hence the most common activities through-out most of the Federal States are incubators, cluster initiatives, and co-financing of federal programmes. Despite these similarities, the actual governance of R&D policy is substantially different in the individual states. There is no standard way of manag-ing the interaction between the national and the regional policies and activities. Some big national funding programmes, e.g. K-plus, K-ind / K-net and COMET or the Aus-trian NANO-Initiative, are co-financed by the Federal States; the programmes, how-ever, are primarily governed by the federal institutions. The main research performer groups The main R&D performing sectors are the (i) corporate sector, (ii) the higher educa-tion sector and (iii) the government sector. In terms of volume, about two thirds of the total R&D in Austria is performed within the corporate sector, mainly by companies in-house; the corporate sector also contains the co-operative sub-sector, a group of non-university applied research institutes, organised as limited companies and there-fore allocated to the corporate sector. They perform applied research and develop-ment and provide R&D services for industry (to various extents), and together they account for approx. 6.6% of R&D performed in Austria. The largest player in this group of non-university applied research institutes is the Austrian Research Centers (ARC). The 'Competence Centres' are a special case in this group, as they are 'tem-porary institutions' linking partners from science and industry in jointly defined strate-gic research programmes for up to seven or ten years; more than 30 Centres have been established since 1998. The higher education sector, above all the universities, accounts for nearly 27% of R&D performed in Austria (see chapter 4). The govern-ment sector is a relatively small R&D performer, accounting for approx. 5% of the to-tal volume, and the private non-profit sector's contribution is less than 0.5%.

5 Apart from some annual fluctuations, this share has remained fairly constant throughout the last 20

years.

Page 13 of 53


2 - Resource mobilisation The purpose of this chapter is to analyse and assess how challenges related to the provision of inputs for research activities are addressed by the national research sys-tem. Its actors have to ensure and justify that adequate financial and human re-sources are most appropriately mobilised for the operation of the system. A central issue in this domain is the long time horizon required until the effects of the mobilisa-tion become visible. Increasing system performance in this domain is a focal point of the Lisbon Strategy, with the Barcelona EU overall objective of a R&D investment of 3% of GDP and an appropriate public/private split as orientation, but also highlighting the need for a sufficient supply of qualified researchers. Four different challenges in the domain of resource mobilisation for research which need to be addressed appropriately by the research system can be distinguished:

• Justifying resource provision for research activities;

• Securing long term investment in research;

• Dealing with uncertain returns and other barriers to private R&D investment; and

• Providing qualified human resources.

2.1 Analysis of system characteristics

2.1.1 Justifying resource provision for research activities

Rationales for support of research The main driver of R&D policy in Austria is the expectation that R&D will contribute to ensuring the future prosperity of the Austrian economy, to growth and employment and thus to a high quality of life and social security (Austrian Council 2001 & 2002, Austrian Government 2004 & 2007). This is in line with the European objectives agreed upon in the Lisbon and Barcelona agendas and in fact, these EU processes have been strong drivers for Austrian politicians to raise public R&D budgets. Since 2000, all Austrian governments – and actually also the opposition parties – have supported the target of increasing R&D expenditures, first to reach 2.5% in 2005 and 3% of GDP in 2010, explicitly referring to the European Union's policy. However, these objectives are supported on a very general level, with little consideration of the role and the legitimation of government interventions. Importance of R&D According to the programme of the current government, which has been inaugurated in February 2007, the challenge for the Austrian research policy is the achievement of both a quantitative and a qualitative leap forward, i.e. to reach the 3% goal by 2010 and to accomplish structural change towards more high-tech (see also 2.3). Compared to other government objectives or policy areas, research certainly is not at the top of the agenda, but it has clearly gained importance during the last decade. Although Austrian GBOARD at 0.65% in 2005 was still below the EU 25 average of 0.74%, governments' commitment is at least mirrored in the development of GBOARD over time: the average annual growth rate of GBOARD in the late 1990ies

Page 14 of 53


was only 1.4% and it has increased to 4.4% between 2000 and 2005; the corre-sponding figures for EU average are 3.6% and 3.9%. Other visible efforts are the re-structured research funding system, the reformed governance of Austrian universi-ties, and a large number of new R&D funding measures. The role of public debate for resource mobilisation Science and research have found their way into many Austrian media: most newspa-pers have a regular science supplement and new magazines are published with pub-lic support, reporting on R&D topics, performance, actors and policy in Austria. Moreover, a variety of initatives aim at familiarizing the general public with R&D; the three ministries in charge of R&D are the main financers of such activities. The main concern of R&D policy addressing the public is to enhance the general public under-standing of science and technology (S&T) and thus to gain acceptance for the alloca-tion of (more) public funds to R&D. Another important aim is the motivation of more young people to decide for a research career, especially in natural sciences and en-gineering. Indeed, it is expected that the gap in engineering and R&D skills may even widen in the coming years. Apart from some noteworthy exceptions, most of these communication activities were and still are based on the (outdated) assumption that the general public just lacked information about S&T, that this would lead to a widely spread sceptical position, and that this relation could be improved by means of one-way information transfer (Fochler & Müller 2006). There is little public debate about the roles of S&T in society in general and about the justification of resource allocation in particular, apart from the discussions among 'insiders' from R&D policy making, funding and administra-tion, the scientific community, industry, and intermediaries. Although some attempts for public debate have been made successfully (e.g. in biotechnology, energy, or the challenges of climate change), these dialogic approaches have not entered the stage of general R&D policy making (see 3.1.1).

2.1.2 Securing long term investment in research

Long-term financing and institutional financing Securing long-term investments in research has first been named as a main chal-lenge in Austria in the first 'Technology Policy Concept' in 1996 and it has been backed up later, mainly by the Austrian Council for Research and Technology Devel-opment (Austrian Council 2001, 2002). Between 2002 and 2005 the GDP percentage of public R&D expenditures has grown from 0.71% to 0.86% in Austria, while at the EU 27 average it stagnated at 0.64%. However, most of these R&D investments have been subject to the annual budgeting cycles, and the big R&D funding agencies traditionally suffered from this practice which often resulted in late decisions and sometimes considerable fluctuations in the budgets available. The problem became even more evident when, beginning in the mid-1990ies, competitive R&D funding was increasingly allocated through specific multi-annual programmes that normally support projects lasting more than one year. Hence the Austrian Council called for 'planning security' through multi-annual budgets for competitive R&D funding and for the financing of R&D institutions (Austrian Council 2003 & 2005). A number of steps have been taken to solve the problem, at least partly: (i) The most substantial change has been made in the governance and funding of Austrian public universities: the University Act of 2002 bases government funding of

Page 15 of 53

http://cordis.europa.eu/erawatch/index.cfm?fuseaction=policy.documentAjax&uuid=7D87AA19-C02B-4306-BCB000A5533F5289


universities on three-years performance contracts between each university and the Federal Ministry of Science and Research, placing the responsibility for the internal allocation of the money on each university. Moreover, university revenue, including tuition fees, now goes directly to the university budgets. This reform is a large step towards planning security for universities and it affects more than 80% of all national institutional R&D financing. However, most of the remaining institutional financing is still allocated on a yearly basis – a problem yet to be solved by the government, es-pecially for the largest non-university research organisations, the Austrian Academy of Sciences and the Austrian Research Centers ARC. (ii) In the last decade, governments provided several tranches of additional funds for R&D (e.g. from privatisation revenues) that were allocated to policy measures without the obligation to keep the annual planning-and-spending cycles. As an advantage, these funds have built the financial basis for a multitude of new policy initiatives, but on the downside, they have prolonged the underlying problem of financial insecurity as they did not imply a long-term commitment to increase public R&D spending within the regular budgets. (iii) The National Foundation for Research and Technology Development has been set up in 2003 for the financing of new measures outside the annual federal budgets; the National Foundation is funded from revenues of a dedicated stock of capital at the Austrian Central Bank and at the ERP-Funds, and up to €135m are allocated an-nually by the Foundation Board. So far, the main beneficiaries have actually not been new but already existing funding measures that would otherwise have suffered from a lack of funding from the regular federal budgets, and some well-established re-search institutions, e.g. the Academy of Sciences, the Ludwig Boltzmann Society, and the Austrian Research Centers ARC. (iv) Ultimately, in December 2007 the Federal Budget Act ('Bundeshaushaltsgesetz') has been changed fundamentally and now it provides the basis for long-term plan-ning in any field of government spending: from 2009 onwards, the entire federal budget will be decided for periods of four years, defining for any budgetary item an upper limit to be spent flexibly within the planning period. European funding and shared infrastructures In the European Framework Programmes (FP) Austrian researchers have continu-ously increased their participation, which is visible in the higher share of Austrian co-ordinators and the larger number of successful Austrian participations in FP 6 com-pared to previous programmes. In FP 6, Austrian participants have been awarded a total of some €347m, i.e. approx. 2.53% of all funds (2.38% in FP 5). Compared to previous FPs, the participation of companies has declined clearly while universities account for 38% of all Austrian participations (Proviso 2007). EU funding has become an important source of competitive funding for universities: in 2004, nearly one third of competitive funding obtained by universities came from the FP (Statistik Austria 2007). On the general policy level the FPs are mainly perceived as an additional source of R&D funding, while the structuring effect they have had is rarely reflected and discussed. In fact, most thematic funding programmes in Austria have been in-spired by FPs priorities and nearly all of them participate in one or several ERA-Net projects. While in each single case, these measures may be well considered, there has been no overall analysis and assessment so far. With respect to Structural Funds (SF), Austrian provinces spent approx. 14% of their SF budget on R&D and innovation measures on average, ranging between 6% and

Page 16 of 53

http://cordis.europa.eu/erawatch/index.cfm?fuseaction=org.documentAjax&uuid=401A5B26-A61C-EE30-0D44EA108382569Dhttp://erawatch.intrasoft.be/KMI/index.cfm?fuseaction=is.document&uuid=7D87DC26-CB3B-1305-AEDE9423469B467E


25% in the different regions (Ohler 2006). The main activities funded are cluster ini-tiatives, incubators and competence centres6. In terms of volume, SF played a minor role compared to the total R&D expenditures in Austria: between 2000 and 2006 approx. 14% of SF equalling approx. €143m, were spent on R&D, which was only 1.2% of all public spending and not more than 0.4% of the total R&D expenditures during that period. Although the SF programming allows for multi-annual funding of projects, the issue of planning security is only partly solved, as there is a certain negative trend in the programme implementation to restrict the planning, funding and commitment for projects to the programme's planning period, irrespective of the pro-jects' characters, objectives and embeddedness in the regional framework. For the SF planning period 2007-2013, the Austrian Strategic Reference Framework names "Innovation- and knowledge-based economy" as one of three strategic objectives, but the relative importance of R&D issues cannot yet be assessed, because no compre-hensive financial analysis is available (ÖROK 2007). Austria invests approx. 6% of all institutional funding to contribute to several interna-tional shared infrastructures and initiatives, which amounts to €56.2m in 2003 (Schi-bany, Jörg, Nones 2005). The largest single contributions go the European Space Agency ESA and the European Organisation for Nuclear Research CERN; moreover Austria is a member of EUMETSAT, the European Molecular Biology Conference EMBC, the European Synchrotron Radiation Facility ESRF, the Synchrotron Light Laboratory ELETTRA, and others. After decades of indecision, the Federal Minster for Science and Research has finally resolved in spring 2008 that Austria will join the European Southern Observatory ESO. The main rationale for these international memberships is to provide for Austrian researchers' access to these infrastructures. Considerations of foreign affairs and political cohesion also play an important role, especially in the cases of CERN and ESA. The Austrian ESA membership is gov-erned mainly as an issue of R&D policy and it is accompanied by a corresponding R&D funding programme at national level, although a considerable share of the ESA activities actually goes into procurement rather than R&D; so far this aspect has not been adequately considered in the management of the Austrian ESA membership. So far, the various Austrian memberships are managed by different ministries and agencies, with little exchange and mutual learning at policy level.

2.1.3 Dealing with uncertain returns and other barriers to business R&D investment

Funding of business R&D in Austria The corporate sector is the largest in terms of volume, both in terms of financing and performing R&D, and during the last decade it has shown the most dynamic growth rate of all financing sectors in absolute and in relative terms. According to recent Statistik Austria estimates for 2007, the corporate sector has invested €3.2b in R&D, or 46.7% of total R&D spending in Austria. Since 2000, BERD has grown by an aver-age of 9.55% per year and it has increased by 89.4%; growth can be observed in nearly all industrial sectors, particularly in the medium-high tech sector and in the knowledge intensive services. Austrian companies` R&D expenditures correspond to 1.08% of GDP in 2005, com-pared to 1.00% on the EU 27 average. Funding from abroad plays a remarkably big

6 In the competence centre programmes SF funds complemented federal funding.

Page 17 of 53

http://erawatch.intrasoft.be/KMI/index.cfm?fuseaction=is.document&uuid=7D87DAAF-F800-CCCC-5F8728C32846B988


role for the Austrian business sector: it is more than twice the EU 27 average of 8-9% during recent years and comparable only to that in a few other countries, e.g. Greece, Latvia and the United Kingdom. According to the most recent comprehen-sive census of R&D financing in Austria, funding from foreign sources financed approx. 19.37% of R&D in Austria in 2004, starting from 2% in the early 1990ies. In recent years this share has declined to 15.5% in 2007 although funding from abroad has grown in absolute terms at approx. 4.1% per year; this relative decline is due to the much larger growth rates of domestic business and government expenditures. Out of these funds from abroad the European Union sources account for only about 8.5%. More than 90% come from foreign companies and (to a minor extent) interna-tional organisations – and approx. 84% of all foreign R&D funding is invested R&D performed by companies located in Austria, many of which are subsidiaries of multi-nationals (Federal Ministries 2007). In other words: nearly a quarter of R&D per-formed in Austrian companies is financed by companies abroad and it is necessary to take this into account when assessing the volume of business R&D in Austria: taken together, domestic and foreign business R&D investments account for approx. 2/3 of total R&D investments. Not only R&D expenditures, but also the number of R&D performing companies has increased markedly, from 1,317 in 1998 to 2,123 companies in 2004 – a growth of 61.2% (Statistik Austria 2007). Together, they employed 68% of all researchers in Austria, i.e. 29,142.6 fulltime equivalent employees, which is an increase of 42.9% compared to 1998. Despite this welcome expansion of the industrial R&D base, con-centration of corporate R&D expenditures is still high, like in most other European countries: while half of the R&D performing companies are small with less than 50 people, they account for only 9.6% of corporate R&D expenditures, and nearly three quarters of R&D expenditures (72.9%) come from the 362 large companies with more than 250 employees, although they are not more 17% of all companies financ-ing R&D (see Figure 3). Moreover, the sectoral structure of industry is decisive for business R&D volume and growth, with the high-tech sector playing the key role (see 3.1.1). Figure 3: The size distribution of Austrian companies financing R&D Size (No. of employees)

Number of companies

% of compa-nies

R&D expendi-tures (€)

% of expendi-tures

1-49 1,081 50.92% 340,478,000 9.57% 50-249 680 32.03% 622,302,000 17.50% 250 and more 362 17.05% 2,593,699,000 72.93% Total 2,123 100% 3,556,479,000 100%

Source: Statistik Austria 2007 The increase in business R&D spending has partly been triggered by the policy measures taken during the last decade, which offered a variety of direct and indirect funding for R&D. However, parts of the increase are very likely due to a more accu-rate and complete declaration of R&D expenditures by the companies, which was caused by the generous expansion of indirect funding (TC 2007) – see also the chap-ter below on government incentives. Contribution of bank and venture capital financing for start-up companies Financing of young firms has repeatedly been identified as a key challenge for the Austrian innovation system. Venture capital investment in Austria is still below EU average, despite a dynamic growth in recent years, and it is mainly invested in ex-

Page 18 of 53


pansions and buy-outs. In 2006, only 6% went to companies in their seed or start-up phase (AVCO 2007), which is taken as an indicator for a relative lack of innovative activity in newly created firms. Bank loans continue to dominate as the main source of funding for start-ups, but banks tend to be relatively averse to taking risks. Hence it comes as no surprise that in Austria more small firms report financing shortcomings than in other countries (OECD 2007). Government incentives for private R&D In accordance with the European objectives the Austrian governments and the Aus-trian Council alike have called for an increase of business R&D expenditures to a level of two thirds of total R&D spending and a number of measures have been set as incentives: subsidies for business R&D have been increased, both in terms of vol-ume and the number of funding instruments, and indirect funding, i.e. tax incentives have been reformed and expanded substantially. Traditionally, awarding schemes of the bottom-up type are by far dominating the direct R&D funding in Austria and the fiscal incentives add on to this. In parallel, a multitude of structural and functional R&D programmes as well as thematic programmes have been initiated throughout the last decade, many of them focusing on science-business-collaboration. The gov-ernment has also strongly supported foreign companies that located their R&D head-quarters in Austria. Direct public funding accounts for a small share of business R&D: in 2004, the public sector funded 3.8%, slightly more than in 2002 (3.6%), similar to the EU 15 average (OECD 2007). For statistical reasons most of the indirect R&D funding is not included in figures of public expenditures – and tax treatment of business R&D is more gener-ous than in most other EU countries (OECD 2007). In recent years, Austria has de-veloped a differentiated system of fiscal incentives related to R&D costs, granting tax allowances and tax deductions as well as a 'research premium' for companies that do not make any profit, i.e. mainly research intensive start-up companies. The total vol-ume of fiscal R&D funding was €421m in 2005, and it had exceeded direct public funding for business R&D already in 2004 (Federal Ministries 2007). This raises the critical question of the effectiveness and efficiency of public funding for business R&D, as the two largest instruments – bottom-up project funding and fiscal incentives – both address all companies alike and do not differentiate specific target groups in particular need of support. Throughout the last decade, R&D policy has put a lot of emphasis on financial incen-tives for business R&D, whereas the general conditions in favour of R&D and innova-tion have received less attention. This policy focus has produced some highly wel-come results, especially a mobilisation of public resources, a comprehensive and highly differentiated set of R&D funding and promotion instruments and a well estab-lished culture of evaluation. On the other side, issues of overall efficiency and effec-tiveness have been neglected for a long time until they appeared on the agenda rather recently (see section 2.3). Moreover, due to the fragmentation and lack of co-herence of the national innovation system, R&D policy makers tend to neglect the in-teractions with other policies that also affect business strategies, e.g. economic poli-cies and regulations, conditions for start-ups, sectoral policies (e.g. environment, en-ergy or health), and policies related to human resources (see 2.1.4), and experts have recommended repeatedly to dedicate more efforts to such issues (Schibany, Jörg, Nones 2005, OECD 2007).

Page 19 of 53


2.1.4 Providing qualified human resources

Providing high quality postgraduate education There are some indications that providing qualified human resources for R&D is one of the key challenges for Austria: the 9.8% share of graduates in science and tech-nology is lower than in the EU average of 12.9%, in particular for females at 4.6% vs. 8.2% (Eurostat 2008), and education expenditures are below the OECD average, especially for tertiary education. The Austrian education system has traditional strengths in the vocational and upper secondary education and it has been argued that graduates leave these schools with skills similar to tertiary education graduates in other countries. However, the focus of these schools is on vocational rather than on high general skills, which are particularly relevant for the diffusion and adoption of advanced technologies and as a basis for careers in R&D (OECD 2007). Doctoral education is of key importance for the education of researchers. In the past, doctoral education has been dominated by individual monitoring rather than by sys-tematic and structured training. Accordingly, the Austrian Science Fund FWF has provided funding for graduate schools for more than a decade. The University Act 2002 provides the new legal basis for a reform of doctoral education in Austria, also in response to the Bologna Process. The Federal Ministry of Science and Research together with the Austrian Science Fund is planning to launch a new funding scheme for doctoral schools in order to improve the qualification of young scientists. Securing career perspectives for researchers Apart from education, career perspectives for researchers are an important chal-lenge, and educational measures will have to be complemented by a supportive envi-ronment for scientific careers in Austria: an adequate statutory framework, attractive working conditions, equal opportunities for male and female researchers, an open job market for scientists, and incentives for internationalisation and mobility. European (and international) mobility of researchers is supported by a wide range of measures in Austria, accessible through two internet platforms, the Austrian Researcher's Mo-bility Portal and the database http://www.grants.at which provides information about all grants and scholarship programmes in Austria; in recent years, special measures have been launched to attract foreign researchers and expatriates. However, some of the key issues for scientific careers are subject to other than R&D policies, e.g. immigration policies and regulations for right of residence, policies for equal opportu-nities, and education policy; due to their cross-cutting nature they require special at-tention – they cannot be solved within R&D policy alone. The situation of female researchers is particularly challenging: although more than half of all university graduates and nearly 42% of all PhDs are women, their participa-tion in research careers is among the lowest all across the EU, especially in the busi-ness sector, where only 10% of all researchers are female in Austria, but 18% in the EU 25 average, and in leading positions – only 9.5% of all university professors com-pared to 15.3% in the EU 25 average. The 'leaky pipeline' phenomenon is blatantly visible in Austria, and according to the 'She Figures 2006', Austria has one of the five thickest 'glass ceilings' in the EU (EC 2006), albeit a look into other economic or so-cietal sectors reveals that this is not limited to careers in R&D. A number of meas-ures have been launched under the umbrella of the inter-ministerial action pro-gramme 'FFORTE' ('Women in Research and Technology'), but it is too early to evaluate the results. Given the modest budget of these measures and the cross-

Page 20 of 53

http://www.grants.at/http://cordis.europa.eu/erawatch/index.cfm?fuseaction=prog.documentAjax&uuid=7D87C012-B1B9-770C-E7B77AF8BBD785E9


cutting nature of the problem, it is unlikely that the situation of women in research will improve significantly unless Gender Mainstreaming becomes standard in all R&D policy measures – and beyond. Attractiveness for foreign researchers The attractiveness of Austria as a location for foreign researchers seems to have in-creased in recent years and research teams at renowned research institutions have indeed become international. There are no legal restrictions to work in Austria for re-searchers even from outside the EU, provided they have a contract with an Austrian university or research institution. However, permanent residence permits are more difficult to obtain and a number of restrictions, e.g. regional quotas for 'key worker' permits (which often affect researchers' spouses), obviously pose growing barriers to highly skilled workers from outside the EU. This could be solved by simplifying ad-ministrative procedures and by removing other obstacles to the immigration of re-searchers (OECD 2007).

2.2 Assessment of strengths and weaknesses Obviously, in recent years resources for R&D have been mobilised successfully by all R&D financing sectors. The remaining weaknesses in this domain are of a cross-cutting nature, dominated by governance issues, and also affect the other domains (demand, production and circulation of knowledge); however, they have already moved onto the policy agenda, as will be outlined in the chapter 2.3. Main strengths Main weaknesses • R&D has become – and remained – a

policy priority supported by all parties. • R&D expenditures have grown substan-

tially during the last decade, especially business expenditures and foreign sources.

• The structural reform of R&D funding agencies provides the institutional basis for an efficient implementation of funding measures in the context of increased public R&D budgets.

• The University Act 2002 grants far-reaching autonomy and more planning security to universities through three-year global budgets.

• Business R&D expenditures and the number of R&D performing companies have increased throughout (nearly) all branches.

• Deficit in human resources, visible in the low participation of women in research, especially in industrial research and in leading positions, and in the low share of tertiary education graduates.

• The increase of public R&D funding has lead to an 'overcrowded' R&D funding system with too many overlapping and sub-critical funding measures.

• Division of responsibilities and tasks be-tween ministries and agencies is still un-settled after the structural changes; there is a lack of leadership on the strategy side and certain tendencies within agencies to become 'ministries'.

2.3 Analysis of recent policy changes in 2007 / 2008 After parliamentary elections in autumn 2006 a new coalition government was formed in January 2007. Despite the new composition of the coalition government, R&D pol-icy remains high on the agenda and the current government carries forward most

Page 21 of 53


R&D policy objectives and priorities identified by its predecessors7. The government again aims at reaching the 3% goal by 2010 with a relation of 1/3 public investment and 2/3 private financing of R&D. In terms of quality the main objective is to accom-plish a structural change of the Austrian research and innovation system, and Austria shall shift from a provider of low- and medium technology to a high-tech provider. Therefore, the infrastructure for the best R&D performers needs to be enhanced and industry shall be encouraged to invest more in R&D, especially in high tech domains (Austrian Government 2007). In 2007 three main initiatives have been launched: (i) The portfolio of public R&D funding measures in Austria is highly diversified and

complex. In order to increase the efficiency as well as the 'legibility' and the un-derstanding of this portfolio, the Federal Government has launched an overall evaluation of government R&D funding in early 2008, with interim results to be presented in summer 2008. This evaluation addresses mainly the portfolio of all direct and indirect funding instruments, however, leaving untouched the institu-tional financing.

(ii) At the occasion of the Technology-Summit in Alpbach in 2007, the Minister of Science and Research has announced the 'Research Dialogue', a dialogue-programme inviting all interested parties to discuss topical issues of the Austrian research system. The initiative comprises a series of workshops and confer-ences organised in different towns in Austria, as well as an open discussion fo-rum on the initiative's website. The Research Dialogue is also expected to pro-vide ideas for the government's R&D related strategies.

(iii) To reach the goal of 3% of GDP spent on R&D by 2010 has been and still is the major quantitative objective of Austria's R&D policy and the government has announced to spend an additional 'billion for research' between 2007 and 2010. At a Research-Dialogue Meeting in December 2007, the Minister for Science and Research has called for an additional quantitative goal, namely to increase the budget spent on basic research to a level of 1% of GDP by 2020; in 2007 the rate was 0.4%.

The reform of the Federal Budget Act ('Bundeshaushaltsgesetz') will extend federal budgeting cycles from one to four years, thus providing the basis for multi-annual planning-and-spending cycles and planning security. With respect to human resources, one important step towards attractive career mod-els at Austrian universities has been made in 2007: a collective agreement for uni-versity employees has been concluded between the association of Austrian universi-ties and the labour union for public services. The agreement is not yet implemented as the financing of the additional costs arising from the agreement is still subject to negotiations with the ministry in charge, the Federal Ministry of Science and Re-search. Challenges Main policy changes Justifying resource provision for research activities.

• confirmation of key R&D political objectives and pri-orities.

7 Moreover, the general R&D-related policies have been supported by all major political parties. There-fore, further continuity can be expected despite the snap parliamentary elections in autumn 2008.

Page 22 of 53

http://www.forschungsdialog.at/


• new initiative for public debate: Research Dialogue.

Securing long term investments in research.

• reform of university funding. • reform of the Federal Budget Act. • additional quantitative goal, 1% of GDP for basic

research. • started: overall evaluation of the public R&D funding

portfolio. Dealing with uncertain returns and other barriers to business R&D investments.

• no major changes.

Providing qualified human re-sources.

• collective agreement for university employees con-cluded.

2.4 Assessment of policy opportunities and risks Overall, these recent policy initiatives are indeed addressing some previously ne-glected issues and they tackle some of the key weaknesses of the Austrian research and innovation system. All these challenges require fundamental changes which take their inherent time, and visible effects can only be expected in the medium to long term. With respect to IG 7 strategy elements, Austrian R&D policy supports both quantita-tive objectives; public and private R&D investments are already well balanced if for-eign and domestic business R&D expenditures are taken together, while further ef-forts are needed to reach the volume target of 3%. Incentives for business R&D are in place and human resource issues are increasingly addressed, though not yet suffi-ciently. General conditions in favour of R&D and innovation have not been dealt with adequately. These are the main opportunities and risks linked to the recent policy changes (see 2.3): Main policy opportunities Main policy-related risks • to make a step towards planning security

and long-term planning for all multi-annual policy measures due to the new federal budget act (four-years budgeting cycles).

• to continue the increase of R&D expendi-tures towards the 3% objective.

• to pursue the issue of human resources with sufficient emphasis and endurance, in particular to implement attractive ca-reer models for scientists and university staff on the basis of the collective agree-ment, and to address the 'next genera-tion' of scientists and researchers.

• to neglect efficiency and performance while being 'addicted' to the 3% expendi-ture target might jeopardise the claim for additional resources.

• to put the increase of R&D spending higher than the general conditions of R&D and innovation and the improve-ment of the human resource 'bottleneck'.

• to get stuck in the implementation of sin-gular human resource programmes while neglecting human resource aspects in the general R&D policy portfolio.

2.5 Summary of the role of the ERA dimension In the general national research policy debate ERA plays a minor role only, even though Austrian policy makers have fully adopted the Lisbon and Barcelona objec-tives for Austrian R&D policy. The government's programme mentions ERA only

Page 23 of 53


briefly as 'a vital frame of reference'; Austrian R&D policy should on the one hand contribute to the development of ERA and on the other hand try to gain the maximum benefit from its initiatives, namely from the European research programmes (Federal Government 2007). ERA-related issues are mainly discussed among 'insiders', above all the experts in the administration, in agencies, and research institutions. European funding is not only a source of additional R&D budgets, especially for uni-versities, it has also directed additional public R&D to similar thematic priorities. At regional level, the Structural Funds have significantly shaped the R&D and – espe-cially – innovation oriented activities of regional policy makers (see 5.1.3). However, despite their de-facto close links in content, the federal R&D policy, ERA-related ac-tivities, and the SF are rarely seen as mutually related and dealt with accordingly (Ohler 2006). With the increased R&D efforts Austria has become more attractive as a location for foreign researchers. While there researchers, even from outside the EU, face no le-gal restrictions to work in Austria, provided they have a contract with an Austrian uni-versity or research institution, other legal barriers remain (see 2.1.4). On the positive side, Austria has been among the first European Countries to adopt the EC directive about researchers' visa and to install a Researchers' Mobility Portal. With regard to the ESFRI roadmap for research infrastructure, the Ministry for Sci-ence and Research is currently developing a corresponding national strategy for (i) the safeguarding and development of the Austrian research infrastructure within the ERA context and (ii) Austrian memberships in international infrastructures (see 2.1.2). The strategy is expected to be published in early 2009, but the new ESO membership and the forthcoming joining of the Facility for Antiproton and Ion Re-search FAIR are already part of it.

3 - Knowledge demand The purpose of this chapter is to analyse and assess how research related knowl-edge demand contributes to the performance of the national research system. It is concerned with the mechanisms to determine the most appropriate use of and tar-gets for resource inputs. The setting and implementation of priorities can lead to co-ordination problems. Monitoring processes identifying the extent to which demand requirements are met are necessary but difficult to effectively implement due to the characteristics of knowledge outputs. Main challenges in this domain are therefore:

• Identifying the drivers of knowledge demand;

• Co-ordinating and channelling knowledge demands; and

• Monitoring demand fulfilment Responses to these challenges are of key importance for the more effective and effi-cient public expenditure on R&D targeted in IG7 of the Lisbon Strategy.

Page 24 of 53


3.1 Analysis of system characteristics

3.1.1 Identifying the drivers of knowledge demand

A broad picture of the knowledge demand structure in terms of volume can be ob-tained by analysing the R&D spending and funding flows as shown in figure 4. The volume of R&D carried out in each sector is shown in the boxes, the arrows depict the financing flows; the percentages indicate the change between 2002 and 2004. The total volume of R&D expenditures in 2004 was €5.25b (Federal Ministries 2007). There are three major sources of financing R&D in Austria and the funding flows within and between the sectors can partly be interpreted as expressions of knowl-edge demand. The corporate sector plays a key role, financing 46.7% of R&D per-formed. The public sector accounts for 37.4% of R&D expenditures, about 90% of which flow into the higher education sector. A remarkably high share of R&D, 15.5%, is financed from abroad, mainly from foreign companies. Together, Austrian and for-eign companies finance nearly two thirds of R&D in Austria. An analysis of GERD by type of research shows that the shares of basic research and – to a lesser extent – also of applied research have declined since 1993 while the share of experimental development has increased from 38% to 45% of GERD (ERAWATCH 2006). This can be explained with the swift growth of business R&D expenditures while the share of public spending decreased relatively to BERD. The trend might have been accelerated by the strong emphasis that R&D policy has put on science-industry collaboration and care must be taken not to weaken universities' capacities to fulfil their key role. Figure 4: R&D funding flows in Austria, 2004

Source: Statistik Austria data presented in (Federal Ministries 2007); for a more detailed description see source or the Austrian ERAWATCH country profile8

8 The private non-profit sector is not included, given its low share in financing and performing R&D (


Drivers of business knowledge demand – the sectoral structure of the econ-omy The sectoral structure of the Austrian economy and its dynamics have been analysed extensively (Federal Ministries 2007 and previous reports). According to the most re-cent R&D survey of 2004, the Austrian corporate sector achieved an overall R&D rate of 1.7%, i.e. R&D expenditures as a percentage of gross value added, with large differences between industrial sectors (Federal Ministries 2007). Setting aside the R&D sector per se, the highest R&D quota can be found in the high-tech and me-dium-high tech industries. Five industries provide for half of the total R&D spending in the corporate sector – but less than 4% of the gross value added in Austria. The structure of the Austrian manufacturing industry is traditionally dominated by medium-tech sectors, while the share of the high-tech sector is smaller than in the EU and OECD average. However, the statistical allocation of firms to their field of ac-tivity does not fully capture their capacities to innovate: many medium-sized Austrian companies are successful internationally with their often highly specialised products and processes and in their sector they are near the frontier of technology – even if this technology happens to be classified as 'medium-tech'. It is also interesting to note that in Austria the high-tech sector's share of BERD has declined by five per-centage points since 1998 while the medium-high tech sector and knowledge inten-sive services have gained importance as financers of R&D – and they contribute to value added to a far larger extent than the high-tech sector, which is small in interna-tional comparison and grows only slowly (Federal Ministries 2007). Figure 5: The five most R&D intensive industry sectors in Austria

Sector R&D rate

Radio, television and communication equipment 41%

Pharmaceuticals 17%

Office machinery and computers 15%

Motor vehicles and their components 12%

Medical, precision and optical instruments 11%

Business R&D expenditures in Austria by both, domestic and foreign companies have increased steadily throughout the last decade, which can be interpreted as an increase in business knowledge demand. A recent analysis shows that this growth was borne by all sectors of industry, especially by medium- and high-tech manufac-turers and by knowledge-intensive business service companies, while the structure and specialisation pattern of the Austrian economy in terms of value added barely changed. For the primary and secondary industrial sectors, this structural stability is largely reflected in the specialisation of Austrian companies compared to the EU-average and value added specialisation correlates with BERD specialisation for most industrial sectors (as classified by International Standard Industrial Classification of all Economic Activities, ISIC): transport (other), electronic equipment, basic and fab-ricated metals, furniture & recycling, wood and publishing, non metallic minerals, ma-chinery, textiles, and plastics are all 'specialisations' in BERD as well as in value added (ERAWATCH 2006). The situation is less clear in the service sector due to its heterogeneous structure which is changing rapidly. While R&D in the traditional ser-vices such as trade and household or personal services still plays a minor role, the knowledge intensive services have clearly increased their R&D activities and account

Page 26 of 53


for more than one quarter of all intramural R&D expenditures in the business sector, the same share as medium-high-tech manufacturing industries. Other indicators for companies' growing knowledge demand are the increased vol-ume of research they subcontract to universities and research institutes and their in-creased demand for highly qualified human resources – see 5.1.1 for details. Drivers of societal knowledge demand In addition to bottom-up project funding and structural programmes, a number of mission-oriented programmes have been launched in order to stimulate and fund R&D which aims at providing solutions for current or future societal problems, e.g. in clean technologies, zero energy housing, transportation, climate change etc. This trend is not unique to Austria – similar issues are addressed by initiatives in other EU Member States and at the European level within the Research Framework Pro-grammes. The societal demand at stake is mainly identified and acted upon by the administra-tion, more precisely, by 'thematic' units within the ministries responsible for R&D is-sues, e.g. for energy and environment, or for transport technologies. In the cases of technology-focused programmes, e.g. 'sustainable production technologies', repre-sentatives from industry and academia were involved in the identification of the fund-ing priorities and in general, application-oriented projects can only be funded if part-ners for the implementation of the results are involved. Only few programmes have actually made the step towards involving societal actors beyond science and industry in the programme development and in the research activities: the programmes 'TRAFO' and 'provision' aim at developing solutions for particular societal problems such as how to cope with climate change in alpine regions or how to handle ethical decision making in the health-care system. The work is done together by scientists and partners from practice e.g. municipal authorities, schools, hospitals. As this kind of collaboration (transdisciplinarity) poses its own challenges, the programmes also develop new and adequate approaches and methods. However, in terms of budget these programmes are small compared to those of the 'standard' public R&D funding activities. Therefore it is questionable if they can reach the critical mass to solve problems of societal dimensions, especially if they do not overcome the gap between ministerial competences and responsibilities, i.e. the R&D programmes are funded and 'owned' by ministries responsible for R&D and there are weak (if any) links to those units and ministries responsible for the respective sectoral policy e.g. policies governing environmental affairs, energy, transport, public health9. Drivers of knowledge demand that is intrinsic to the research sector itself10 The research sector in Austria is clearly dominated by the higher education sector (HES), with nearly 27% of total R&D expenditures in 2004, having increased by 11% compared to 2002. 90% of these funds come from the public sector, 4.65% from abroad, and approx. 4.5% from the corporate sector. These shares are relatively low, however, between 2002 and 2004 the international funding has grown by 31% and funding from the corporate sector has soared by 191%. Within the HES the 21 public universities play by far the largest role as research performers – they are the back-

9 On the other hand, sectoral policies tend to be more conservative and to have longer policy cycles,

which partly explains the weak links – and justifies R&D policies moving ahead. 10 for more information see the ERAWATCH Research Inventory for Austria, for more analysis see

chapter 4

Page 27 of 53

http://cordis.europa.eu/erawatch/index.cfm?fuseaction=prog.documentAjax&uuid=7D87C09F-B6A2-3698-C87630BAEA57B7A2http://cordis.europa.eu/erawatch/index.cfm?fuseaction=prog.docu

erawatch country report 2008 - an assessment of research ... · the austrian research and...

Documents